All Forum Posts by: Colin G Murphy

Thanks @Erwin Groenendijk. In 10+ years buying in Florida, I have yet to see a mortgage product that makes sense for a non US resident financing individual single family rentals that aren´t vacation homes. Every now and again I see one advertised, but the LTVs are low (50-60%) the interest rates are high (above 6%) and the red tape is horrendous. There are far too many hurdles to clear to make them practically useful in my opinion. It will only get worse now as lending criteria is getting tighter due to the current recession/pandemic. If investors have equity they can release in a house in their home country, that would be a lot simpler. 

Back when I was a Spanish resident, I managed to acquire multiple rental properties in Tampa FL using private finance/hard money and refinanced them all with a commercial loan from a local credit union once they were renovated and tenanted. Still had a lot of red tape and the local lenders really had to fight my corner with their underwriting team. 

Hello @Vicente Blanco

I live in Tampa Florida now but I have a Spanish wife and we lived in Madrid for many years. I bought, renovated and sold many US homes from a home office in Pozuelo. Like @Katherine Robbins said, you need to narrow things down to a particular city and once you´ve done that, then dig into the best agents & property managers to help you.

You can open a bank account when you go to personally visit (it is very difficult to open a US account remotely). Don´t let the travel restrictions stop you because your property manager can withhold your income for the first 3-6 months if you need time to get that organised. 

You can find an accountant after you have made your first purchase - there are several who specialise in filing tax returns for non US residents and I can recommend some. An accountant can also talk to you about the pros and cons of LLCs (a C Corp might be a more efficient vehicle for a non US resident depending on how much you want to invest and how long you want to keep funds in the US). In my experience, opening any entity to hold a couple of rentals is often an unnecessary expense. There is plenty of time to move assets into an LLC down the line if you have sound reasons for doing so. I have sold property to investors in 30+ countries and the vast majority of them bought with cash in their own names and got a decent insurance policy with liability coverage.

Also, you haven´t mentioned finance, but it is extremely difficult for non US residents to secure on individual rental properties. There are more options for large purchases (commercial loans) and vacation homes. 

Suerte!

Hi @Josh Dixon, yes there are a lot of Irish investors (myself included) on Biggerpockets. People from all over the world come to this great website for inspiration and advice. However you won´t find a lot of useful information about how to invest in the Irish market here, it is mostly geared towards the US market. 

Hi @Jordan Kennedy

Great to hear from another Irishman! I live in Tampa Florida and run a property flipping business here with another Irish business partner. We have held onto some of the homes along the way and I was in your shoes a few years back when I was investing in Tampa but living overseas. As you´ve discovered, it isn´t easy at all for a non US resident to secure a loan for rental properties. Ironically, it is easier to finance a vacation home that is earning no money.  There are some lenders out there that have products for foreigners - more red tape, more fees, interest rates in the 6-7% range and 30-40% deposit requirements. Certainly better than nothing and send me a direct message if you want the details. I financed my first five rentals all in one go by purchasing and rehabbing them with private money and then refinancing them with a commercial loan through a local credit union. Some credit unions and local banks are ok to deal with non US residents for commercial loans, particularly experienced ones. 

Depends what kind of searches they are doing @Account Closed. Not all title agents clear utility liens before transferring ownership. If you specifically request it, then you should be ok. 

Hi @Account Closed

Do you have the date of the most recent water lien? You should call the water company and try to find out how much is owed. Just because they have a $250 lien doesn´t mean they are going to turn on water after you pay $250. Multiple times I have bought properties at foreclosure auctions that had public liens of $200-$300 and actual water bills of $2000+. 

If a property is vacant and nobody switches off the water, they just keep adding up the monthly bills and penalties, often for years. Sometimes you can get those bills reduced significantly with a bit of negotiation and other times they´ll offer a $50 reduction on a bill of $2550. 

So don´t let it discourage you from buying - just bear in mind the actual cost to get water turned on could be 10 times higher than the lien they put on it, especially if that lien date is 12+ months ago.  

On the other hand, you might find it pretty easy to get that code enforement fine waived if you can show them that you cleaned up the mess left by the previous owner. Again, involves a bit of back and forth with the county. 

Not much you can do about the pavement assessments, they need to be paid, but very straightforward. 

Either way, none of the above liens are complicated for a title company, all pretty standard. What gets complicated is if the probate/title wasn´t transferred cleanly in the past. 

Hi @Account Closed

Happy to help you here. I buy 8-10 properties per month in the Port Richey / New Port Richey / Holiday area and I took a look at this one when it was in the public foreclosure auctions back in April 2019 (plaintiff took it and now trying to sell it as an REO).

Firstly bear in mind that this is in an AE floodzone, which makes it more expensive for any conventional finance investors looking at it as a rental. As a rule of thumb, most (but certainly not all) homes west of US19 in West Pasco are in A/AE zones. 

Secondly, you´ll notice that all of the homes two blocks behind this house are mobile homes. Nothing wrong with that, but it devalues the single family homes right beside them. Here you have about 20 single families sandwiched by the 19 highway on one side and 100+ mobile homes on the other. 

Thirdly, the ARV of this is about $103 per sq ft or $100k. There are a couple of areas in Port Richey where you can get $115-$120 per sq ft, but this isn´t one of them.

Finally, in terms of the renovation, the roof is fine, but that´s about it. You´d need a budget at least $22-25k to replace the HVAC, repair the stucco (not cheap) and completely update the interiors. That´s my budget using my contractors. Someone else might spend $30k+ doing the same thing. 

Very best of luck! West Pasco is a great market for fix & flippers. 

Re Screens in Florida. Advice from our legal council. I think this clears matters up on this issue in Florida. 

83.51 Landlord’s obligation to maintain premises.—

(1) The landlord at all times during the tenancy shall:

(a) Comply with the requirements of applicable building, housing, and health codes; or

(b) Where there are no applicable building, housing, or health codes, maintain the roofs, windows, doors, floors, steps, porches, exterior walls, foundations, and all other structural components in good repair and capable of resisting normal forces and loads and the plumbing in reasonable working condition. The landlord, at commencement of the tenancy, must ensure that screens are installed in a reasonable condition. Thereafter, the landlord must repair damage to screens once annually, when necessary, until termination of the rental agreement.

So it depends on your local codes. here is an example from one Florida Municipality.

Sec. 18-103. - Minimum housing standards.

No person shall occupy as owner-occupant, or let or sublet to another for occupancy (for compensation or not), any dwelling or dwelling unit designed or intended to be used for the purpose of living, sleeping, cooking, or eating therein, nor shall any vacant dwelling building be permitted to exist which does not comply with the following requirements:

(w) Screens. Dwelling units which do not have a central air conditioning system shall have screens on all exterior openable windows and doors used or required for ventilation. Screens on windows and doors shall be stretched and fitted and maintained without significant open rips or tears. A closing device shall be installed on all screen doors.

So if you have central AC and your renting a property out and local codes read as above a landlord does not need legally to provide screens. As a practical matter you may want to install them, but its not a legal requirement it appears. Seek your own advice on this in your jurisdiction.

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Morning all 

As an Irishman who lived through the Celtic Tiger and who has been a full time investor in Tampa Florida since 2009, I´ve seen my share of bubbles and crashes.

While real estate is a great business and great way to earn a living, America is a bit obsessed with home ownership (it´s certainly not the only country) but there is no need to be. Contrary to the argument in the report above, I don´t believe for a minute that a high percentage of owner occupiers means an economy is healthy and history has shown that there is little to gain (and a lot to lose) by making it too easy for people to buy their own home. Getting the government involved in building millions of houses and convincing more Americans to buy their own homes is not necessarily a good idea, because it often makes things worse (think of the millions of foreclosures from 2008-2010). To put it simply, home ownership isn´t for everyone.

Look at Germany. Economically, it is right up there with the most powerful countries in the world right? Well, if you are worried about homeownership in the US falling from 70% to 64%, consider that the homeownership rate in Germany has been steady at 52% and most Germans are perfectly happy with that. In Switzerland, which is one of the richest countries in the world, it is just 44%.

When I was a kid growing up in middle class Ireland, there was a bit of a stigma attached to renting. If the people down the street were renters, people just assumed it was because they were a bit poorer than the rest and that they didn´t have great jobs.

There has been a big shift in attitudes since then and not just among younger generations either. In any urban area across America, you can be a successful professional with a lovely family and a happy long term renter all at the same time. I know plenty of people with good jobs that are renters and I´m sure most of you do too. 

So we have a situation across the country where banks make it very hard to qualify for a loan, where house prices, rents and student debt are all increasing quite quickly and where wages are either steady or rising at a much slower rate. You don´t need a degree in Economics to figure out that this is a combination that will create a huge new generation of renters.

My takeaway from all this is that investors have a HUGE opportunity to be key suppliers of inventory as America continues its shift away from homeownership and towards renting. You can provide great rental properties to people who want a safe place to live. 

In exchange for doing that, the renters will pay back your mortgages, build equity in your homes and provide passive income streams to fund your lifestyles and retirements.